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Sipp Regulators – Who are they?

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07/12/2018

If you feel that your pension investment was a scam, you need to report this and get your money back. We discuss who the self-invested personal pension or Sipp regulators are and the support they can offer you.

UK Sipp regulators

In the UK, Sipps are regulated by the Financial Conduct Authority (FCA). The body provides clear guidelines on how pension providers should operate. They govern the products they should offer, how client money should be handled. This also covers best practice on due diligence and conflicts of interest.

Guidelines on the due diligence expected by personal pension providers was recently in the spotlight at the Berkeley Burke Judicial Review. The courts ruled that pension providers are responsible in the client vetting process. They must ensure people are not becoming financially vulnerable by investing in the wrong product. In the best interests of the client, the provider should made them aware when a scheme is unregulated and could damage them financially.

If people are mis-sold a regulated pension scheme, the Sipp regulators have a number of support services. The Financial Services Compensation Scheme (FSCS) oversees regulated complaints. The body reviews any cases of mis-selling or fraud and compensates victims accordingly.

However, the FSCS can only offer a maximum payout of £50,000. Many people who invest in a scheme have usually transferred their entire pension pot. In many cases, they have lost hundreds of thousands of pounds, if not millions. The FSCS cannot adequately compensate these people and we would urge them to explore the other avenues available.

Unregulated Sipps

The most common kind of pension complaint we deal with is unregulated. Unregulated advisers or investments are not governed by the FCA, meaning that there is no clear means of compensation for those who fall victim to mis-selling.

Schemes such as Ethical Forestry, Store First and Harlequin Properties were sold to people as low risk, high return pension investments. However, the schemes went bust or were revealed to be fraudulent, leaving people with no pension pot and no idea what to do. As many of these companies were overseas, some seemingly disappeared altogether.

In the event that this happens, we urge people to get in touch as there is something that can be done. There is no straightforward compensation scheme for unregulated investments. However, complaints can be brought to the Financial Ombudsman Service or through the Courts to get the money back.

We are litigating on behalf of many clients who have been mis-sold Sipps to ensure that they get the compensation they deserve. As legal practitioners, we can challenge Sipp providers who allowed unregulated investments in the court.

Do you think you were mis-sold a pension investment? Get in touch and we can help you get the compensation you deserve.